How to adjust for and explain repair concessions?

[NC Values]

How do you adjust Comps and explain the effect on value of seller cash concessions for repairs? If any adjustments are called for, then how do you avoid "double counting" adjustments for "Concessions" and "Condition"?

 

[Mike Boyd]

I put the estimated repair amount on the concession line. Who knows when or if the repairs will be made. The buyer might just put the money in his "new truck" account.
Under condition....relative to that specific repair, I will ignore that money is being kicked back to the buyer for that repair. If it needs a new roof, I will report "nu roof needed" and make a positive adjustment toward the subject. (it is off-set by the cash kick-back to the buyer in that transaction. Then, of course, explain explain explain.

 

[Restrain]

I have looked at the market reaction beyond costs. You have holding costs, the costs with hassling with the repairs, possible hidden repair costs, return on investment, etc. These can double or triple the base costs. What I have done is put in a line adjustment for "market resistance" and explain it in the adjustment comments.

 

[Pittsburgh Pete]

How do you adjust Comps and explain the effect on value of seller cash concessions for repairs? If any adjustments are called for, then how do you avoid "double counting" adjustments for "Concessions" and "Condition"?

Acknowledging the concession reflects the price paid for the property in its sold condition ($250,000 property with $10,000 concession for condition is $240,000--price reflects the price paid for the house that needs the $10,000 in repairs).

If you're talking about concessions for the subject property, the concession in no way impacts your analysis. Property value "as is" is property value "as is!"